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Strategic Business Planning

by | reviewed 27/04/2019
Learn how to develop a Business Strategy and the process of Strategic Business Planning.
A business strategy describes: the business direction for the future in terms of a vision, strategic themes and a portfolio of planned changes. OGC
The Office of Government Commerce (OGC) Successful Delivery Toolkit defines three stages in developing a business strategy:
  • business analysis,
  • identifying the strategic direction for the future and
  • high-level planning of the implementation of the Business Strategy.

Business Analysis in Strategic Business Planning

Business analysis looks at three areas:
  • mission and vision,
  • goals and objectives,
  • external environment and internal resources.
The company mission statement should state succinctly what it does, its reason for being and its purpose. The Vision Statement should set out the future vision for the company. Get a Vision Statement Template

Goals and objectives are subtly different. The company's goals usually contain a numerical target and are set at corporate level. They are achieved at a lower level by the meeting of a series of departmental objectives.

Consideration of the external environment is crucial in determining the strategy and adapting it over time: the analysis should consider political, economic, social, technological, legislative and environmental factors. Finally the internal resources of the company are reviewed to establish the range and quality of company capacity within the organization.

Identifying Strategic Direction

Identifying the company's direction or strategic choice involves the generation and evaluation of options along with a consideration of the company mission, vision, stakeholder expectations and existing competitive advantage.

The generation of options is driven by the challenges facing the organization, which OGC describes as the strategic issues. Options should identify the areas of business activity in which the organization needs to engage in order to meet its challenges.

Planning the delivery of the Business Strategy

The third stage involves high level planning to identify candidates for action (programme of business change) and to develop an implementation plan.

This stage identifies resources and management control requirements, the organization structure required to make the strategy work and analyzes of the impact of the change, the level of expertise for managing the change and the human resources implications.

The outputs of the planning stages produce a strategic plan which contains the strategy statement comprising the mission, vision, goals and objectives, a list of candidates for action and a high level plan of action.

The Business Strategy Development Process

The process involved in Developing a Business Strategy is illustrated in the flow chart below:
Flowchart illustrating the strategic management process, from strategic analysis to business change implementation.
Flowchart depicting the strategic management process. It starts with analyzing strategic issues, followed by strategy formulation, setting strategic themes, agenda for change, strategy implementation, business change programs, and policies and procedures, with oversight by senior management. Image source: OGC, Setting and managing strategic direction.

The image illustrates a strategic management process, depicting the flow from strategic analysis to business change implementation. The process includes the following steps:

  1. Strategic Issues - Analysis:
    • Environmental Opportunities and Threats
    • Organizational Resources and Competences

    These analyses influence the vision, values, and expectations, which feed into the mission and goals/objectives.

  2. Strategy Formulation:
    • Alternatives
    • Evaluation and Choice

    The outcomes of the strategic analysis inform the strategy formulation, where alternatives are evaluated, and choices are made.

  3. Strategic Themes:

    Defined based on the chosen strategy.

  4. Setting the Agenda for Change:

    Strategic themes guide setting the agenda for change.

  5. Strategy Implementation and High-Level Planning:

    Based on the agenda for change, strategies are implemented, and high-level planning is conducted.

  6. Programs of Business Change:

    The implementation plans lead to programs of business change.

  7. Policies and Procedures:

    Developed to support the business change programs.

  8. Strategic Control (Senior Management):

    Oversees the entire process to ensure alignment with strategic objectives and manage necessary adjustments.

Arrows indicate the direction of influence and flow between these components, highlighting feedback loops and connections among various stages.

The analysis of strategic issues leads to the strategy formulation and is underpinned and directed by the vision, mission, goals and objectives.

The strategy formulation is controlled by senior management and produces the strategic themes leading to an agenda for change, high-level plans and finally the candidates for action (programme of business change).

Existing policies and procedures inform the strategy formulation and the high level planning.

References and recommended reading on Strategic Business Planning

OGC (Office of Government Commerce) - stakeholder and project management guidance

Lawrie, A., 2014. Business and Strategic Planning for voluntary organizations London: Directory of Social Change.

Katsioloudes, Marios. and Abouhanian, A K,. 2016 The Strategic Planning Process: Understanding Strategy in Global Markets. Abingdon: Routledge

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